With changes to banks lending coming into effect over the past couple of weeks I thought it pertinent to pass on some useful information from Corcoran French solicitors regarding first home buyers; ‘Purchasing your first home can be a very daunting prospect, especially trying to save enough money for a deposit. Luckily there are some options out there to assist first home buyers with this. The Government has just this week announced changes in this area that we wanted you to be aware of. KiwiSaver First Home Withdrawal This enables a first home buyer to withdraw their KiwiSaver Funds to purchase if they have been contributing for at least 3 years and intend to live in the property. A recent law change now allows all funds to be withdrawn, except for $1000 which must be left in the KiwiSaver account. The funds are able to be used for the deposit on a property or on settlement. Each KiwiSaver provider has their own withdrawal forms to be completed and require these applications at least 10 working days before the KiwiSaver funds are required. This means first home buyers need to be very organised and have all the documentation sorted if the Agreement for Sale and Purchase contains short time frames from confirmation of conditions to settlement, or if they need the funds for the deposit. Housing New Zealand Home Start Grant This is a grant of up to $5,000 for individuals and up to $10,000 for couples purchasing an older/existing home. A recent law change also means that first home buyers who are building or buying a brand new property with a Code Compliance Certificate issued in the last six months are eligible for a grant of up to $10,000 for individuals and $20,000 for couples. The amounts depend on how long the first home buyer has been contributing towards Kiwisaver. Further information is found on Housing New Zealand's website: www.hnzc.co.nz There is certain eligibility criteria that must be met and this is available on Housing New Zealand's website for any purchases, but we mention specifically the following: 1. Income thresholds - individual $85,000 or less, couple $130,000 or less (before tax) in the last 12 months. 2. 10% deposit available (with proof available) - this can include KiwiSaver First Home Withdrawal and the Home Start Grant funds. 3. The purchase price of the property must be within the price cap - in Christchurch City, Waimakariri and Selwyn District it is $500,000. There are further rules if a first home buyer is buying land and planning to build. Again, this information can be found on Housing New Zealand's website. Housing New Zealand require the applications for the New Zealand Home Start Grant to be provided to them at least 4 weeks before settlement. Pre-approval is available and a first home buyer should obtain this as the paperwork is extensive. Pre-approval will last for 6 months. If a first home buyer does not have pre-approval, they need to be conscious of this time frame when they find a property and sign an Agreement for Sale and Purchase so as to ensure there is enough time before settlement for their application to be processed. One fact a lot of first home buyers are unaware of is that the Grant monies will not be paid until the day of settlement. This means they cannot be used for the deposit (as per the Agreement for Sale and Purchase). Should you wish to know more, please contact Caitlin Stack on (03) 379 4660 or email: [email protected]’ Leave a Reply. |
James Twiss
Licensed Business Owner of Harcourts Four Seasons Realty 2017 Ltd Greg Roberts
Licensed Business Owner of Harcourts Four Seasons Realty 2017 Ltd Archives
September 2020
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